Press Release

Summit Materials, Inc. Reports Second Quarter 2021 Results

Company Release - 08/04/2021

- Record Second Quarter Net Revenue of $618.5 million, an increase of 7.5%

-Net income attributable to Summit Inc. of $56.7 million

-Record Second Quarter Adjusted EBITDA of  $163.8 million, an increase of 2.4%

-Aggregates volumes increased 14.7%

-Cement volumes increased 8.3%

DENVER--(BUSINESS WIRE)-- Summit Materials, Inc. (NYSE: SUM, “Summit,” “Summit Materials,” "Summit Inc." or the “Company”), a leading vertically integrated construction materials company, today announced results for the second quarter 2021.

For the three months ended July 3, 2021, the Company reported net income attributable to Summit Inc. of $56.7 million, or $0.48 per basic share, compared to net income attributable to Summit Inc. of $57.1 million, or $0.50 per basic share in the comparable prior year period. Summit reported adjusted diluted net income of $58.0 million, or $0.49 per adjusted diluted share as compared to adjusted diluted net income of $58.9 million, or $0.50 per adjusted diluted share in the prior year period.

Summit's net revenue increased $43.3 million, or 7.5% in the second quarter of 2021 to $618.5 million, compared to $575.2 million in the second quarter of 2020, on higher aggregates, ready-mix concrete and cement revenue relative to a year ago on continued favorable market demand conditions and price growth in all lines of business.

The Company reported operating income of $95.9 million in the second quarter 2021, a decrease of 4.1%, compared to $100.1 million in the prior year period. Higher aggregates, cement and ready-mix volume and prices across the business were offset by increases in cost of revenue and general and administrative expenses associated with implementation of our Elevate Summit strategy, combined with fewer working days in Texas due to unusually wet conditions in May. Summit's operating margin percentage for the three months ended July 3, 2021 decreased to 15.5% from 17.4%, from the comparable period a year ago, due to the factors noted above.

Adjusted EBITDA increased in the second quarter 2021 to $163.8 million as compared to $159.9 million in the second quarter 2020.

For the three months ended July 3, 2021, sales volumes increased 14.7% in aggregates, 8.3% in cement and 6.3% in ready-mix concrete relative to the same period last year on strong demand in most of our markets. Average selling prices in the second quarter of 2021 increased 2.4% in aggregates, 2.9% in cement, 3.0% in ready-mix concrete and 0.7% in asphalt. Adjusted cash gross profit for aggregates expanded to $85.8 million in the second quarter 2021, an increase of 14.3% relative to $75.0 million in the year ago quarter.

Anne Noonan, CEO of Summit Materials, commented, "Today we are reporting Summit's third consecutive quarter of record Adjusted EBITDA. These results reflect our team's commitment to operational and commercial excellence, which delivered volume growth in most lines of business and pricing growth in all lines of business. Demand fundamentals remain strong in our rural and exurban markets, while most of the state Departments of Transportation that we serve have returned to typical letting and operating conditions.

As part of our Elevate Summit strategy, we have now completed a total of five strategic divestitures, as we exit non-core or non-leading market positions, unlock proceeds for more strategic use, and convert some of those businesses to an asset light model to drive higher aggregates pull through. We believe Summit's organic growth profile and asset light conversion model position the company to absorb the impact of the foregone contribution from those five divested businesses, so we are leaving our full year Adjusted EBITDA guidance unchanged at this time."

As of July 3, 2021, the Company had $469.1 million in cash and $1.9 billion in debt outstanding. The Company's $345 million revolving credit facility has $329.1 million available after outstanding letters of credit. For the quarter ended July 3, 2021, cash flow provided by operations was $74.7 million and cash paid for capital expenditures was $132.7 million.

Brian Harris, CFO of Summit Materials, added, "We are making meaningful progress on the leverage reduction element of our Elevate Summit strategy. Our Elevate Summit goal is less than 3.0x leverage, and we continue to believe that is within our sights in 2021."

For the full year 2021, Summit has not made any changes to its outlook for Adjusted EBITDA of approximately $490 million to $520 million, but may revisit this forecast as the year progresses. The Company continues to expect 2021 capital expenditure guidance of approximately $200 million to $220 million including approximately $25 million to $35 million for greenfield projects.

Second Quarter 2021 | Results by Line of Business

Aggregates Business: Aggregates net revenues increased by $23.5 million to $153.5 million in the second quarter 2021 when compared to the prior year period. Aggregates adjusted cash gross profit margin decreased to 55.9% in the second quarter 2021 as compared to 57.7% in the second quarter 2020. Aggregates sales volumes increased 14.7% in the second quarter 2021 when compared to the prior year period on organic growth in both the West and East segments. Volume increased in the Intermountain West, Virginia, Carolinas, Georgia, and British Columbia markets, partially offset by slight decreases in Kansas and Missouri as wind farm and flood repair volumes in the second quarter of 2020 did not repeat in 2021. Average selling prices for aggregates increased 2.4% in the second quarter 2021.

Cement Business: Cement segment net revenues increased 13.4% to $85.8 million in the second quarter 2021, when compared to the prior year period, on higher sales volume of cement. Cement adjusted cash gross profit margin decreased to 47.2% in the second quarter, compared to 50.8% in the prior year period. Our Green America Recycling facility continues to ramp up production following an explosion that occurred in April 2020. Sales volume of cement increased 8.3% in the second quarter and average selling prices increased 2.9% when compared to the prior year period.

Products Business: Products net revenues were $292.1 million in the second quarter 2021, compared to $285.0 million in the prior year period. Products adjusted cash gross profit margin decreased to 18.8% in the second quarter, versus 20.6% in the prior year period. Our organic average sales price for ready-mix concrete increased 3.0% and organic sales volumes of ready-mix concrete increased 6.3%, as volume increased in our Intermountain West, Texas, and British Columbia markets, and prices increased in most markets. Our organic average sales price for asphalt increased 0.7%, with pricing gains across our Texas geographies and British Columbia, while volume decreased 11.3%, due to a divestiture of a paving business.

Second Quarter 2021 | Results By Reporting Segment

Net revenue increased by 7.5% to $618.5 million in the second quarter 2021, versus $575.2 million in the prior year period on organic growth in our aggregates, cement, and ready-mix concrete operations. The Company reported operating income of $95.9 million in the second quarter 2021, compared to $100.1 million in the prior year period as favorable volume and price trends in most lines of business were partially offset by fewer working days in Texas due to unusually wet conditions in May.

Net income decreased to $57.8 million in the second quarter of 2021, compared to income of $58.9 million in the prior year period. Adjusted EBITDA increased 2.4% to $163.8 million in the second quarter of 2021, compared to $159.9 million in the prior year period on higher revenue.

West Segment: The West Segment reported operating income of $53.2 million in the second quarter 2021, compared to $56.7 million in the prior year period. Adjusted EBITDA was $78.8 million in the second quarter 2021, compared to $78.9 million in the prior year period, as higher volume and price for aggregates and ready-mix concrete were offset by fewer working days in Texas, which negatively impacted asphalt and paving volumes in particular. Market conditions continue to reflect strong demand for aggregates and ready-mix concrete, particularly in the Houston and Salt Lake City areas. Aggregates revenue in the second quarter increased 32.7% over the prior year period, while organic volumes and average sales prices increased 4.8% and 5.0%, respectively. Ready-mix concrete revenue in the second quarter 2021 increased 15.5% over the prior year period, as organic volumes increased 13.2% and organic average sales prices increased 2.2%, reflecting favorable market conditions for residential construction. Asphalt revenue decreased by 26.8% in the second quarter 2021 over the prior year period as asphalt volumes decreased 25.8%, due to wet conditions in Texas cited above, and sales prices increased 1.7%.

East Segment: The East Segment reported operating income of $34.6 million in the second quarter 2021, compared to $31.5 million in the prior year period as net revenue increases in aggregates, asphalt and paving and related services exceeded a decrease in ready-mix concrete. Adjusted EBITDA increased to $57.3 million in the second quarter 2021, compared to $53.4 million in the prior year period. Aggregates revenue increased 7.4%, as volumes increased 3.4% and average selling prices increased 3.8%. Ready-mix concrete revenue decreased 6.7% as organic volumes decreased by 11.4%, partially offset by organic average selling prices which increased 5.3%, primarily due to lower volumes in Kansas as wind farm projects in 2020 were not fully replaced in 2021. Asphalt revenue increased 35.8% as organic volumes increased 27.3% on higher volumes in Kentucky, Kansas and Virginia, while organic average selling prices increased 0.6% on lower liquid asphalt index prices in most of our markets.

Cement Segment: The Cement Segment reported operating income of $25.8 million in the second quarter 2021, compared to $26.1 million in the prior year period. Adjusted EBITDA increased to $39.4 million in the second quarter 2021, compared to $35.6 million in the prior year period on higher volumes. The segment reported increased organic sales volumes and organic average selling prices of 8.3% and 2.9%, respectively, during the second quarter 2021 as compared to the prior year period. Our Green America Recycling facility continues to ramp up production following an explosion that occurred in April 2020.

Liquidity and Capital Resources

As of July 3, 2021, the Company had cash on hand of $469.1 million and borrowing capacity under its $345 million revolving credit facility of $329.1 million. The borrowing capacity on the revolving credit facility is currently fully available to the Company within the terms and covenant requirements of its credit agreement. As of July 3, 2021, the Company had $1.9 billion in debt outstanding.

Financial Outlook

For the full year 2021, Summit has not made any changes to its outlook for Adjusted EBITDA of approximately $490 million to $520 million, but may revisit this forecast as the year progresses. The Company continues to expect 2021 capital expenditure guidance of approximately $200 million to $220 million including approximately $25 million to $35 million for greenfield projects.

Webcast and Conference Call Information

Summit Materials will conduct a conference call on Thursday, August 5, 2021, at 11:00 a.m. eastern time (9:00 a.m. mountain time) to review the Company’s second quarter 2021 financial results, discuss recent events and conduct a question-and-answer session.

A webcast of the conference call and accompanying presentation materials will be available in the Investors section of Summit’s website at investors.summit-materials.com. To listen to a live broadcast, go to the site at least 15 minutes prior to the scheduled start time in order to register, download, and install any necessary audio software.

To participate in the live teleconference on August 5, 2021:

Domestic Live: 1-877-823-8690
International Live: 1-825-312-2236
Conference ID: 3865846
Password: Summit

To listen to a replay of the teleconference, which will be available through August 12, 2021:

Domestic Replay: 1-800-585-8367
International Replay: 1-416-621-4642
Conference ID: 3865846

About Summit Materials

Summit Materials is a leading vertically integrated materials-based company that supplies aggregates, cement, ready-mix concrete and asphalt in the United States and British Columbia, Canada. Summit is a geographically diverse, materials-based business of scale that offers customers a single-source provider of construction materials and related downstream products in the public infrastructure, residential and nonresidential end markets. Summit has a strong track record of successful acquisitions since its founding and continues to pursue growth opportunities in new and existing markets. For more information about Summit Materials, please visit www.summit-materials.com.

Non-GAAP Financial Measures

The Securities and Exchange Commission (“SEC”) regulates the use of “non-GAAP financial measures,” such as Adjusted Net Income (Loss), Adjusted Diluted Net Income, Adjusted Diluted EPS, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Cash Gross Profit, Adjusted Cash Gross Profit Margin, Free Cash Flow, Net Leverage and Net Debt which are derived on the basis of methodologies other than in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). We have provided these measures because, among other things, we believe that they provide investors with additional information to measure our performance, evaluate our ability to service our debt and evaluate certain flexibility under our restrictive covenants. Our Adjusted Net Income (Loss), Adjusted Diluted Net Income, Adjusted Diluted EPS, Adjusted EBITDA, Further Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Cash Gross Profit, Adjusted Cash Gross Profit Margin, Free Cash Flow, Net Leverage and Net Debt may vary from the use of such terms by others and should not be considered as alternatives to or more important than net income (loss), operating income (loss), revenue or any other performance measures derived in accordance with U.S. GAAP as measures of operating performance or to cash flows as measures of liquidity.

Adjusted EBITDA, Adjusted EBITDA Margin, and other non-GAAP measures have important limitations as analytical tools, and you should not consider them in isolation or as substitutes for analysis of our results as reported under U.S. GAAP. Some of the limitations of Adjusted EBITDA are that these measures do not reflect: (i) our cash expenditures or future requirements for capital expenditures or contractual commitments; (ii) changes in, or cash requirements for, our working capital needs; (iii) interest expense or cash requirements necessary to service interest and principal payments on our debt; and (iv) income tax payments we are required to make. Because of these limitations, we rely primarily on our U.S. GAAP results and use Adjusted EBITDA, Adjusted EBITDA Margin and other non-GAAP measures on a supplemental basis.

Adjusted EBITDA, Further Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Cash Gross Profit, Adjusted Cash Gross Profit Margin, Adjusted Net Income (Loss), Adjusted Diluted Net Income, Adjusted Diluted EPS, Free Cash Flow, Net Leverage and Net Debt reflect additional ways of viewing aspects of our business that, when viewed with our GAAP results and the accompanying reconciliations to U.S. GAAP financial measures included in the tables attached to this press release, may provide a more complete understanding of factors and trends affecting our business. We strongly encourage investors to review our consolidated financial statements in their entirety and not rely on any single financial measure. Reconciliations of the non-GAAP measures used in this press release are included in the attached tables. Because GAAP financial measures on a forward-looking basis are not accessible, and reconciling information is not available without unreasonable effort, we have not provided reconciliations for forward-looking non-GAAP measures. For the same reasons, we are unable to address the probable significance of the unavailable information, which could be material to future results.

Cautionary Statement Regarding Forward-Looking Statements

This press release includes “forward-looking statements” within the meaning of the federal securities laws, which involve risks and uncertainties. Forward-looking statements include all statements that do not relate solely to historical or current facts, and you can identify forward-looking statements because they contain words such as “believes,” “expects,” “may,” “will,” “should,” “outlook,” “seeks,” “intends,” “trends,” “plans,” “estimates,” “projects” or “anticipates” or similar expressions that concern our strategy, plans, expectations or intentions. All statements made relating to our estimated and projected earnings, margins, costs, expenditures, cash flows, growth rates and financial results are forward-looking statements. These forward-looking statements are subject to risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. We derive many of our forward-looking statements from our operating budgets and forecasts, which are based upon many detailed assumptions. While we believe that our assumptions are reasonable, it is very difficult to predict the effect of known factors, and, of course, it is impossible to anticipate all factors that could affect our actual results. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by us or any other person that the results or conditions described in such statements or our objectives and plans will be realized. Important factors could affect our results and could cause results to differ materially from those expressed in our forward-looking statements, including but not limited to the factors discussed in the section entitled “Risk Factors” in Summit Inc.’s Annual Report on Form 10-K for the fiscal year ended January 2, 2021, as filed with the SEC, and any factors discussed in the section entitled “Risk Factors” in any of our subsequently filed SEC filings.

  • the impact of the COVID-19 pandemic, or any similar crisis, on our business;
  • our dependence on the construction industry and the strength of the local economies in which we operate;
  • the cyclical nature of our business;
  • risks related to weather and seasonality;
  • risks associated with our capital-intensive business;
  • competition within our local markets;
  • our ability to execute on our acquisition strategy, successfully integrate acquisitions with our existing operations and retain key employees of acquired businesses;

  • our ability to implement and successfully execute on our Elevate Summit Strategy;
  • our dependence on securing and permitting aggregate reserves in strategically located areas;
  • declines in public infrastructure construction and delays or reductions in governmental funding, including the funding by transportation authorities and other state agencies particularly if such are not augmented by federal funding or if the federal government fails to act on highway infrastructure bill;
  • our reliance on private investment in infrastructure, which may be adversely affected by periods of economic stagnation and recession;
  • environmental, health, safety and climate change laws or governmental requirements or policies concerning zoning and land use;
  • costs associated with pending and future litigation;
  • rising prices for commodities, labor and other production and delivery inputs as a result of inflation or otherwise;
  • conditions in the credit markets;
  • our ability to accurately estimate the overall risks, requirements or costs when we bid on or negotiate contracts that are ultimately awarded to us;
  • material costs and losses as a result of claims that our products do not meet regulatory requirements or contractual specifications;
  • cancellation of a significant number of contracts or our disqualification from bidding for new contracts;
  • special hazards related to our operations that may cause personal injury or property damage not covered by insurance;
  • unexpected factors affecting self-insurance claims and reserve estimates;
  • our substantial current level of indebtedness, including our exposure to variable interest rate risk;
  • our dependence on senior management and other key personnel, and our ability to retain and attract qualified personnel;
  • supply constraints or significant price fluctuations in the electricity and petroleum-based resources that we use, including diesel and liquid asphalt;
  • climate change and climate change legislation or other regulations;
  • unexpected operational difficulties;
  • interruptions in our information technology systems and infrastructure; including cybersecurity and data leakage risks; and
  • potential labor disputes, strikes, other forms of work stoppage or other union activities.

All subsequent written and oral forward-looking statements attributable to us, or persons acting on our behalf, are expressly qualified in their entirety by these cautionary statements. Any forward-looking statement that we make herein speaks only as of the date of this press release. We undertake no obligation to publicly update or revise any forward-looking statement as a result of new information, future events or otherwise, except as required by law.

SUMMIT MATERIALS, INC. AND SUBSIDIARIES

Unaudited Consolidated Statements of Operations

($ in thousands, except share and per share amounts)

 

 

 

 

 

 

 

Three months ended

 

Six months ended

 

 

July 3,

 

June 27,

 

July 3,

 

June 27,

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Revenue:

 

 

 

 

 

 

 

 

Product

 

$

527,800

 

 

 

$

488,260

 

 

 

$

882,034

 

 

 

$

793,567

 

 

Service

 

90,730

 

 

 

86,980

 

 

 

134,977

 

 

 

124,079

 

 

Net revenue

 

618,530

 

 

 

575,240

 

 

 

1,017,011

 

 

 

917,646

 

 

Delivery and subcontract revenue

 

49,387

 

 

 

55,769

 

 

 

78,750

 

 

 

80,553

 

 

Total revenue

 

667,917

 

 

 

631,009

 

 

 

1,095,761

 

 

 

998,199

 

 

Cost of revenue (excluding items shown separately below):

 

 

 

 

 

 

 

 

Product

 

346,697

 

 

 

315,079

 

 

 

623,831

 

 

 

569,134

 

 

Service

 

71,632

 

 

 

68,660

 

 

 

111,829

 

 

 

107,184

 

 

Net cost of revenue

 

418,329

 

 

 

383,739

 

 

 

735,660

 

 

 

676,318

 

 

Delivery and subcontract cost

 

49,387

 

 

 

55,769

 

 

 

78,750

 

 

 

80,553

 

 

Total cost of revenue

 

467,716

 

 

 

439,508

 

 

 

814,410

 

 

 

756,871

 

 

General and administrative expenses

 

47,448

 

 

 

39,727

 

 

 

99,090

 

 

 

81,413

 

 

Depreciation, depletion, amortization and accretion

 

58,233

 

 

 

53,928

 

 

 

114,569

 

 

 

105,706

 

 

Gain on sale of property, plant and equipment

 

(1,403

)

 

 

(2,214

)

 

 

(3,172

)

 

 

(4,131

)

 

Operating income

 

95,923

 

 

 

100,060

 

 

 

70,864

 

 

 

58,340

 

 

Interest expense

 

24,216

 

 

 

25,608

 

 

 

48,402

 

 

 

53,426

 

 

Loss (gain) on sale of businesses

 

236

 

 

 

 

 

 

(15,432

)

 

 

 

 

Other income, net

 

(4,695

)

 

 

(1,616

)

 

 

(9,584

)

 

 

(1,527

)

 

Income from operations before taxes

 

76,166

 

 

 

76,068

 

 

 

47,478

 

 

 

6,441

 

 

Income tax expense (benefit)

 

18,408

 

 

 

17,181

 

 

 

12,965

 

 

 

(5,720

)

 

Net income

 

57,758

 

 

 

58,887

 

 

 

34,513

 

 

 

12,161

 

 

Net income attributable to Summit Holdings (1)

 

1,099

 

 

 

1,823

 

 

 

371

 

 

 

76

 

 

Net income attributable to Summit Inc.

 

$

56,659

 

 

 

$

57,064

 

 

 

$

34,142

 

 

 

$

12,085

 

 

Earnings per share of Class A common stock:

 

 

 

 

 

 

 

 

Basic

 

$

0.48

 

 

 

$

0.50

 

 

 

$

0.29

 

 

 

$

0.11

 

 

Diluted

 

$

0.48

 

 

 

$

0.50

 

 

 

$

0.29

 

 

 

$

0.11

 

 

Weighted average shares of Class A common stock:

 

 

 

 

 

 

 

 

Basic

 

117,637,036

 

 

 

114,111,204

 

 

 

116,650,881

 

 

 

113,856,657

 

 

Diluted

 

118,585,398

 

 

 

114,137,857

 

 

 

117,832,026

 

 

 

114,252,268

 

 

(1) Represents portion of business owned by pre-IPO investors rather than by Summit.

 

SUMMIT MATERIALS, INC. AND SUBSIDIARIES

Consolidated Balance Sheets

($ in thousands, except share and per share amounts)

 

 

 

 

 

 

 

July 3,

 

January 2,

 

 

2021

 

2021

 

 

(unaudited)

 

(audited)

Assets

 

 

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

 

$

469,097

 

 

$

418,181

 

Accounts receivable, net

 

316,615

 

 

254,696

 

Costs and estimated earnings in excess of billings

 

28,717

 

 

8,666

 

Inventories

 

198,217

 

 

200,308

 

Other current assets

 

15,271

 

 

11,428

 

Total current assets

 

1,027,917

 

 

893,279

 

Property, plant and equipment, less accumulated depreciation, depletion and amortization (July 3, 2021 - $1,184,841 and January 2, 2021 - $1,132,925)

 

1,865,841

 

 

1,850,169

 

Goodwill

 

1,176,351

 

 

1,201,291

 

Intangible assets, less accumulated amortization (July 3, 2021 - $13,366 and January 2, 2021 - $11,864)

 

71,409

 

 

47,852

 

Deferred tax assets, less valuation allowance (July 3, 2021 - $1,675 and January 2, 2021 - $1,675)

 

226,722

 

 

231,877

 

Operating lease right-of-use assets

 

28,164

 

 

28,543

 

Other assets

 

55,981

 

 

55,000

 

Total assets

 

$

4,452,385

 

 

$

4,308,011

 

Liabilities and Stockholders’ Equity

 

 

 

 

Current liabilities:

 

 

 

 

Current portion of debt

 

$

6,354

 

 

$

6,354

 

Current portion of acquisition-related liabilities

 

13,519

 

 

10,265

 

Accounts payable

 

152,285

 

 

120,813

 

Accrued expenses

 

150,154

 

 

160,570

 

Current operating lease liabilities

 

7,019

 

 

8,188

 

Billings in excess of costs and estimated earnings

 

12,524

 

 

16,499

 

Total current liabilities

 

341,855

 

 

322,689

 

Long-term debt

 

1,890,697

 

 

1,892,347

 

Acquisition-related liabilities

 

32,815

 

 

12,246

 

Tax receivable agreement liability

 

328,812

 

 

321,680

 

Noncurrent operating lease liabilities

 

22,316

 

 

21,500

 

Other noncurrent liabilities

 

140,968

 

 

121,281

 

Total liabilities

 

2,757,463

 

 

2,691,743

 

Stockholders’ equity:

 

 

 

 

Class A common stock, par value $0.01 per share; 1,000,000,000 shares authorized, 117,955,888 and 114,390,595 shares issued and outstanding as of July 3, 2021 and January 2, 2021, respectively

 

1,180

 

 

1,145

 

Class B common stock, par value $0.01 per share; 250,000,000 shares authorized, 99 shares issued and outstanding as of July 3, 2021 and January 2, 2021

 

 

 

 

Additional paid-in capital

 

1,313,414

 

 

1,264,681

 

Accumulated earnings

 

360,914

 

 

326,772

 

Accumulated other comprehensive income

 

8,866

 

 

5,203

 

Stockholders’ equity

 

1,684,374

 

 

1,597,801

 

Noncontrolling interest in Summit Holdings

 

10,548

 

 

18,467

 

Total stockholders’ equity

 

1,694,922

 

 

1,616,268

 

Total liabilities and stockholders’ equity

 

$

4,452,385

 

 

$

4,308,011

 

 

SUMMIT MATERIALS, INC. AND SUBSIDIARIES

Unaudited Consolidated Statements of Cash Flows

($ in thousands)

 

 

 

 

 

Three months ended

 

 

July 3,

 

June 27,

 

 

2021

 

 

2020

 

Cash flow from operating activities:

 

 

 

 

Net income

 

$

34,513

 

 

 

$

12,161

 

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

Depreciation, depletion, amortization and accretion

 

118,430

 

 

 

111,278

 

 

Share-based compensation expense

 

10,190

 

 

 

9,797

 

 

Net gain on asset and business disposals

 

(18,390

)

 

 

(4,131

)

 

Change in deferred tax asset, net

 

2,743

 

 

 

(8,175

)

 

Other

 

92

 

 

 

1,244

 

 

Decrease (increase) in operating assets, net of acquisitions and dispositions:

 

 

 

 

Accounts receivable, net

 

(60,829

)

 

 

(28,969

)

 

Inventories

 

(14,606

)

 

 

(27,391

)

 

Costs and estimated earnings in excess of billings

 

(21,475

)

 

 

(30,557

)

 

Other current assets

 

(3,925

)

 

 

654

 

 

Other assets

 

4,927

 

 

 

6,420

 

 

(Decrease) increase in operating liabilities, net of acquisitions and dispositions:

 

 

 

 

Accounts payable

 

26,858

 

 

 

15,410

 

 

Accrued expenses

 

(4,496

)

 

 

4,681

 

 

Billings in excess of costs and estimated earnings

 

(2,031

)

 

 

(1,253

)

 

Tax receivable agreement liability

 

7,132

 

 

 

993

 

 

Other liabilities

 

(4,482

)

 

 

(461

)

 

Net cash provided by operating activities

 

74,651

 

 

 

61,701

 

 

Cash flow from investing activities:

 

 

 

 

Acquisitions, net of cash acquired

 

(7,271

)

 

 

 

 

Purchases of property, plant and equipment

 

(132,723

)

 

 

(105,724

)

 

Proceeds from the sale of property, plant and equipment

 

6,806

 

 

 

6,607

 

 

Proceeds from sale of businesses

 

103,649

 

 

 

 

 

Other

 

(27

)

 

 

1,629

 

 

Net cash used in investing activities

 

(29,566

)

 

 

(97,488

)

 

Cash flow from financing activities:

 

 

 

 

Payments on debt

 

(17,433

)

 

 

(11,388

)

 

Payments on acquisition-related liabilities

 

(8,378

)

 

 

(9,703

)

 

Proceeds from stock option exercises

 

31,766

 

 

 

310

 

 

Other

 

(417

)

 

 

(907

)

 

Net cash provided by (used in) financing activities

 

5,538

 

 

 

(21,688

)

 

Impact of foreign currency on cash

 

293

 

 

 

(437

)

 

Net increase (decrease) in cash

 

50,916

 

 

 

(57,912

)

 

Cash and cash equivalents—beginning of period

 

418,181

 

 

 

311,319

 

 

Cash and cash equivalents—end of period

 

$

469,097

 

 

 

$

253,407

 

 

 

SUMMIT MATERIALS, INC. AND SUBSIDIARIES

Unaudited Revenue Data by Segment and Line of Business

($ in thousands)

 

 

 

 

 

 

 

Three months ended

 

Six months ended

 

 

July 3,

 

June 27,

 

July 3,

 

June 27,

 

 

2021

 

2020

 

2021

 

2020

Segment Net Revenue:

 

 

 

 

 

 

 

 

West

 

$

313,617

 

 

$

299,024

 

 

$

548,361

 

 

$

483,516

 

East

 

219,091

 

 

200,554

 

 

342,159

 

 

320,543

 

Cement

 

85,822

 

 

75,662

 

 

126,491

 

 

113,587

 

Net Revenue

 

$

618,530

 

 

$

575,240

 

 

$

1,017,011

 

 

$

917,646

 

 

 

 

 

 

 

 

 

 

Line of Business - Net Revenue:

 

 

 

 

 

 

 

 

Materials

 

 

 

 

 

 

 

 

Aggregates

 

$

153,496

 

 

$

129,989

 

 

$

270,884

 

 

$

226,150

 

Cement (1)

 

82,169

 

 

73,293

 

 

120,308

 

 

106,156

 

Products

 

292,135

 

 

284,978

 

 

490,842

 

 

461,261

 

Total Materials and Products

 

527,800

 

 

488,260

 

 

882,034

 

 

793,567

 

Services

 

90,730

 

 

86,980

 

 

134,977

 

 

124,079

 

Net Revenue

 

$

618,530

 

 

$

575,240

 

 

$

1,017,011

 

 

$

917,646

 

 

 

 

 

 

 

 

 

 

Line of Business - Net Cost of Revenue:

 

 

 

 

 

 

 

 

Materials

 

 

 

 

 

 

 

 

Aggregates

 

$

67,734

 

 

$

54,942

 

 

$

136,031

 

 

$

114,465

 

Cement

 

41,672

 

 

34,894

 

 

79,032

 

 

71,549

 

Products

 

237,343

 

 

226,168

 

 

408,963

 

 

382,385

 

Total Materials and Products

 

346,749

 

 

316,004

 

 

624,026

 

 

568,399

 

Services

 

71,580

 

 

67,735

 

 

111,634

 

 

107,919

 

Net Cost of Revenue

 

$

418,329

 

 

$

383,739

 

 

$

735,660

 

 

$

676,318

 

 

 

 

 

 

 

 

 

 

Line of Business - Adjusted Cash Gross Profit (2):

 

 

 

 

 

 

 

 

Materials

 

 

 

 

 

 

 

 

Aggregates

 

$

85,762

 

 

$

75,047

 

 

$

134,853

 

 

$

111,685

 

Cement (3)

 

40,497

 

 

38,399

 

 

41,276

 

 

34,607

 

Products

 

54,792

 

 

58,810

 

 

81,879

 

 

78,876

 

Total Materials and Products

 

181,051

 

 

172,256

 

 

258,008

 

 

225,168

 

Services

 

19,150

 

 

19,245

 

 

23,343

 

 

16,160

 

Adjusted Cash Gross Profit

 

$

200,201

 

 

$

191,501

 

 

$

281,351

 

 

$

241,328

 

 

 

 

 

 

 

 

 

 

Adjusted Cash Gross Profit Margin (2)

 

 

 

 

 

 

 

 

Materials

 

 

 

 

 

 

 

 

Aggregates

 

55.9

%

 

57.7

%

 

49.8

%

 

49.4

%

Cement (3)

 

47.2

%

 

50.8

%

 

32.6

%

 

30.5

%

Products

 

18.8

%

 

20.6

%

 

16.7

%

 

17.1

%

Services

 

21.1

%

 

22.1

%

 

17.3

%

 

13.0

%

Total Adjusted Cash Gross Profit Margin

 

32.4

%

 

33.3

%

 

27.7

%

 

26.3

%

(1) Net revenue for the cement line of business excludes revenue associated with hazardous and non-hazardous waste, which is processed into fuel and used in the cement plants and is included in services net revenue. Additionally, net revenue from cement swaps and other cement-related products are included in products net revenue.
(2) Adjusted cash gross profit is calculated as net revenue by line of business less net cost of revenue by line of business. Adjusted cash gross profit margin is defined as adjusted cash gross profit divided by net revenue.
(3) The cement adjusted cash gross profit includes the earnings from the waste processing operations, cement swaps and other products. Cement line of business adjusted cash gross profit margin is defined as cement adjusted cash gross profit divided by cement segment net revenue.

SUMMIT MATERIALS, INC. AND SUBSIDIARIES

Unaudited Volume and Price Statistics

(Units in thousands)

 

 

 

Three months ended

 

Six months ended

Total Volume

 

July 3, 2021

 

June 27, 2020

 

July 3, 2021

 

June 27, 2020

Aggregates (tons)

 

17,091

 

 

14,901 

 

 

30,600

 

 

26,093

 

Cement (tons)

 

708

 

 

654 

 

 

1,048

 

 

954

 

Ready-mix concrete (cubic yards)

 

1,534

 

 

1,443 

 

 

2,872

 

 

2,686

 

Asphalt (tons)

 

1,557

 

 

1,755 

 

 

2,031

 

 

2,163

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended

 

Six months ended

Pricing

 

July 3, 2021

 

June 27, 2020

 

July 3, 2021

 

June 27, 2020

Aggregates (per ton)

 

$

11.39

 

 

$

11.12 

 

 

$

11.06

 

 

$

11.00

 

Cement (per ton)

 

119.64

 

 

116.29 

 

 

118.68

 

 

116.26

 

Ready-mix concrete (per cubic yards)

 

119.94

 

 

116.41 

 

 

119.18

 

 

115.31

 

Asphalt (per ton)

 

59.87

 

 

59.48 

 

 

59.91

 

 

58.99

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended

 

Six months ended

 

 

Percentage Change in

 

Percentage Change in

Year over Year Comparison

 

Volume

 

Pricing

 

Volume

 

Pricing

Aggregates (per ton)

 

14.7

%

 

2.4 

%

 

17.3

%

 

0.5

%

Cement (per ton)

 

8.3

%

 

2.9 

%

 

9.9

%

 

2.1

%

Ready-mix concrete (per cubic yards)

 

6.3

%

 

3.0 

%

 

6.9

%

 

3.4

%

Asphalt (per ton)

 

(11.3

)%

 

0.7 

%

 

(6.1

)%

 

1.6

%

 

 

 

 

 

 

 

 

 

 

 

Three months ended

 

Six months ended

 

 

Percentage Change in

 

Percentage Change in

Year over Year Comparison (Excluding acquisitions)

 

Volume

 

Pricing

 

Volume

 

Pricing

Aggregates (per ton)

 

2.7

%

 

4.7 

%

 

4.6

%

 

2.7

%

Cement (per ton)

 

8.3

%

 

2.9 

%

 

9.9

%

 

2.1

%

Ready-mix concrete (per cubic yards)

 

6.3

%

 

3.0 

%

 

6.9

%

 

3.4

%

Asphalt (per ton)

 

(11.3

)%

 

0.7 

%

 

(6.1

)%

 

1.6

%

SUMMIT MATERIALS, INC. AND SUBSIDIARIES

Unaudited Reconciliations of Gross Revenue to Net Revenue by Line of Business

($ and Units in thousands, except pricing information)

 

 

 

 

 

Three months ended July 3, 2021

 

 

 

 

 

 

Gross Revenue

 

Intercompany

 

Net

 

 

Volumes

 

Pricing

 

by Product

 

Elimination/Delivery

 

Revenue

Aggregates

 

17,091

 

 

$

11.39

 

 

$

194,595

 

 

$

(41,099

)

 

 

$

153,496

 

Cement

 

708

 

 

119.64

 

 

84,673

 

 

(2,504

)

 

 

82,169

 

Materials

 

 

 

 

 

$

279,268

 

 

$

(43,603

)

 

 

$

235,665

 

Ready-mix concrete

 

1,534

 

 

119.94

 

 

183,936

 

 

(75

)

 

 

183,861

 

Asphalt

 

1,557

 

 

59.87

 

 

93,246

 

 

(82

)

 

 

93,164

 

Other Products

 

 

 

 

 

103,259

 

 

(88,149

)

 

 

15,110

 

Products

 

 

 

 

 

$

380,441

 

 

$

(88,306

)

 

 

$

292,135

 

 

 

Six months ended July 3, 2021

 

 

 

 

 

 

Gross Revenue

 

Intercompany

 

Net

 

 

Volumes

 

Pricing

 

by Product

 

Elimination/Delivery

 

Revenue

Aggregates

 

30,600

 

 

$

11.06

 

 

$

338,389

 

 

$

(67,505

)

 

 

$

270,884

 

Cement

 

1,048

 

 

118.68

 

 

124,376

 

 

(4,068

)

 

 

120,308

 

Materials

 

 

 

 

 

$

462,765

 

 

$

(71,573

)

 

 

$

391,192

 

Ready-mix concrete

 

2,872

 

 

119.18

 

 

342,272

 

 

(178

)

 

 

342,094

 

Asphalt

 

2,031

 

 

59.91

 

 

121,667

 

 

(140

)

 

 

121,527

 

Other Products

 

 

 

 

 

177,141

 

 

(149,920

)

 

 

27,221

 

Products

 

 

 

 

 

$

641,080

 

 

$

(150,238

)

 

 

$

490,842

 

 

SUMMIT MATERIALS, INC. AND SUBSIDIARIES

Unaudited Reconciliations of Non-GAAP Financial Measures

($ in thousands, except share and per share amounts)

 

The tables below reconcile our net income (loss) to Adjusted EBITDA by segment for the three and six months ended July 3, 2021 and June 27, 2020.

 

Reconciliation of Net Income (Loss) to Adjusted EBITDA

 

Three months ended July 3, 2021

by Segment

 

West

 

East

 

Cement

 

Corporate

 

Consolidated

($ in thousands)

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

55,447

 

 

$

37,035

 

 

$

33,230

 

 

$

(67,954

)

 

$

57,758

Interest (income) expense

 

(2,860

)

 

(2,176

)

 

(4,035

)

 

33,287

 

 

24,216

Income tax expense

 

1,198

 

 

156

 

 

 

 

17,054

 

 

18,408

Depreciation, depletion and amortization

 

25,133

 

 

21,146

 

 

10,143

 

 

1,101

 

 

57,523

EBITDA

 

$

78,918

 

 

$

56,161

 

 

$

39,338

 

 

$

(16,512

)

 

$

157,905

Accretion

 

218

 

 

408

 

 

84

 

 

 

 

710

(Gain) loss on sale of businesses

 

(273

)

 

509

 

 

 

 

 

 

236

Non-cash compensation

 

 

 

 

 

 

 

4,827

 

 

4,827

Other

 

(92

)

 

206

 

 

 

 

 

 

114

Adjusted EBITDA

 

$

78,771

 

 

$

57,284

 

 

$

39,422

 

 

$

(11,685

)

 

$

163,792

Adjusted EBITDA Margin (1)

 

25.1

%

 

26.1

%

 

45.9

%

 

 

 

26.5

%

 

Reconciliation of Net Income (Loss) to Adjusted EBITDA

 

Three months ended June 27, 2020

by Segment

 

West

 

East

 

Cement

 

Corporate

 

Consolidated

($ in thousands)

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

57,040

 

 

$

32,206

 

 

$

29,386

 

 

$

(59,745

)

 

$

58,887

 

Interest (income) expense

 

(709

)

 

(433

)

 

(3,116

)

 

29,866

 

 

25,608

 

Income tax expense (benefit)

 

1,054

 

 

(36

)

 

 

 

16,163

 

 

17,181

 

Depreciation, depletion and amortization

 

22,050

 

 

21,014

 

 

9,291

 

 

992

 

 

53,347

 

EBITDA

 

$

79,435

 

 

$

52,751

 

 

$

35,561

 

 

$

(12,724

)

 

$

155,023

 

Accretion

 

115

 

 

380

 

 

86

 

 

 

 

581

 

Non-cash compensation

 

 

 

 

 

 

 

4,892

 

 

4,892

 

Other

 

(607

)

 

253

 

 

 

 

(229

)

 

(583

)

Adjusted EBITDA

 

$

78,943

 

 

$

53,384

 

 

$

35,647

 

 

$

(8,061

)

 

$

159,913

 

Adjusted EBITDA Margin (1)

 

26.4

%

 

26.6

%

 

47.1

%

 

 

 

27.8

%

 

Reconciliation of Net Income (Loss) to Adjusted EBITDA

 

Six months ended July 3, 2021

by Segment

 

West

 

East

 

Cement

 

Corporate

 

Consolidated

($ in thousands)

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

72,883

 

 

$

44,004

 

 

$

31,625

 

 

$

(113,999

)

 

$

34,513

 

Interest (income) expense

 

(4,892

)

 

(3,896

)

 

(8,080

)

 

65,270

 

 

48,402

 

Income tax expense

 

1,384

 

 

90

 

 

 

 

11,491

 

 

12,965

 

Depreciation, depletion and amortization

 

50,057

 

 

42,620

 

 

18,211

 

 

2,205

 

 

113,093

 

EBITDA

 

$

119,432

 

 

$

82,818

 

 

$

41,756

 

 

$

(35,033

)

 

$

208,973

 

Accretion

 

434

 

 

877

 

 

165

 

 

 

 

1,476

 

Gain on sale of businesses

 

(273

)

 

(15,159

)

 

 

 

 

 

(15,432

)

Non-cash compensation

 

 

 

 

 

 

 

10,190

 

 

10,190

 

Other

 

(174

)

 

493

 

 

 

 

 

 

319

 

Adjusted EBITDA

 

$

119,419

 

 

$

69,029

 

 

$

41,921

 

 

$

(24,843

)

 

$

205,526

 

Adjusted EBITDA Margin (1)

 

21.8

%

 

20.2

%

 

33.1

%

 

 

 

20.2

%

 

Reconciliation of Net Income (Loss) to Adjusted EBITDA

 

Six months ended June 27, 2020

by Segment

 

West

 

East

 

Cement

 

Corporate

 

Consolidated

($ in thousands)

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

57,538

 

 

$

21,139

 

 

$

17,108

 

 

$

(83,624

)

 

$

12,161

 

Interest (income) expense

 

(1,287

)

 

(1,002

)

 

(6,292

)

 

62,007

 

 

53,426

 

Income tax expense (benefit)

 

587

 

 

(165

)

 

 

 

(6,142

)

 

(5,720

)

Depreciation, depletion and amortization

 

43,734

 

 

41,734

 

 

17,099

 

 

1,981

 

 

104,548

 

EBITDA

 

$

100,572

 

 

$

61,706

 

 

$

27,915

 

 

$

(25,778

)

 

$

164,415

 

Accretion

 

231

 

 

756

 

 

171

 

 

 

 

1,158

 

Non-cash compensation

 

 

 

 

 

 

 

9,797

 

 

9,797

 

Other

 

608

 

 

495

 

 

 

 

(899

)

 

204

 

Adjusted EBITDA

 

$

101,411

 

 

$

62,957

 

 

$

28,086

 

 

$

(16,880

)

 

$

175,574

 

Adjusted EBITDA Margin (1)

 

21.0

%

 

19.6

%

 

24.7

%

 

 

 

19.1

%

 

(1) Adjusted EBITDA Margin is defined as Adjusted EBITDA as a percentage of net revenue.

The table below reconciles our net income attributable to Summit Materials, Inc. to adjusted diluted net income per share for the three and six months ended July 3, 2021 and June 27, 2020. The per share amount of the net income attributable to Summit Materials, Inc. presented in the table is calculated using the total equity interests for the purpose of reconciling to adjusted diluted net income per share.

 

 

Three months ended

 

Six months ended

 

 

July 3, 2021

 

June 27, 2020

 

July 3, 2021

 

June 27, 2020

Reconciliation of Net Income Per Share to Adjusted Diluted EPS

 

Net Income

 

Per Equity Unit

 

Net Income

 

Per Equity Unit

 

Net Income

 

Per Equity Unit

 

Net Income

 

Per Equity Unit

Net income attributable to Summit Materials, Inc.

 

$

56,659

 

 

$

0.47

 

 

$

57,064

 

 

$

0.49

 

 

$

34,142

 

 

 

$

0.29

 

 

 

$

12,085

 

 

 

$

0.10

 

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to noncontrolling interest

 

1,099

 

 

0.02

 

 

1,823

 

 

0.01

 

 

371

 

 

 

 

 

 

76

 

 

 

 

 

Loss (gain) on sale of businesses

 

236

 

 

 

 

 

 

 

 

(15,432

)

 

 

(0.13

)

 

 

 

 

 

 

 

Adjusted diluted net income before tax related adjustments

 

57,994

 

 

0.49

 

 

58,887

 

 

0.50

 

 

19,081

 

 

 

0.16

 

 

 

12,161

 

 

 

0.10

 

 

Changes in unrecognized tax expense (benefit)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(9,537

)

 

 

(0.08

)

 

Adjusted diluted net income

 

$

57,994

 

 

$

0.49

 

 

$

58,887

 

 

$

0.50

 

 

$

19,081

 

 

 

$

0.16

 

 

 

$

2,624

 

 

 

$

0.02

 

 

Weighted-average shares:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic Class A common stock

 

117,436,461

 

 

 

 

114,111,204

 

 

 

 

116,423,833

 

 

 

 

 

113,856,657

 

 

 

 

LP Units outstanding

 

1,885,789

 

 

 

 

3,053,115

 

 

 

 

2,249,499

 

 

 

 

 

3,103,672

 

 

 

 

Total equity units

 

119,322,250

 

 

 

 

117,164,319

 

 

 

 

118,673,332

 

 

 

 

 

116,960,329

 

 

 

 

The following table reconciles operating income to Adjusted Cash Gross Profit and Adjusted Cash Gross Profit Margin for the three and six months ended July 3, 2021 and June 27, 2020.

 

 

Three months ended

 

Six months ended

 

 

July 3,

 

June 27,

 

July 3,

 

June 27,

Reconciliation of Operating Income to Adjusted Cash Gross Profit

 

2021

 

 

2020

 

 

2021

 

 

2020

 

($ in thousands)

 

 

 

 

 

 

 

 

Operating income

 

$

95,923

 

 

$

100,060

 

 

$

70,864

 

 

$

58,340

 

General and administrative expenses

 

47,448

 

 

39,727

 

 

99,090

 

 

81,413

 

Depreciation, depletion, amortization and accretion

 

58,233

 

 

53,928

 

 

114,569

 

 

105,706

 

Gain on sale of property, plant and equipment

 

(1,403

)

 

(2,214

)

 

(3,172

)

 

(4,131

)

Adjusted Cash Gross Profit (exclusive of items shown separately)

 

$

200,201

 

 

$

191,501

 

 

$

281,351

 

 

$

241,328

 

Adjusted Cash Gross Profit Margin (exclusive of items shown separately) (1)

 

32.4

%

 

33.3

%

 

27.7

%

 

26.3

%

 

(1) Adjusted Cash Gross Profit Margin is defined as Adjusted Cash Gross Profit as a percentage of net revenue.

The following table reconciles net cash provided by operating activities to free cash flow for the three and six months ended July 3, 2021 and June 27, 2020.

 

 

Three months ended

 

Six months ended

 

 

July 3,

 

June 27,

 

July 3,

 

June 27,

($ in thousands)

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Net income

 

$

57,758

 

 

 

$

58,887

 

 

 

$

34,513

 

 

 

$

12,161

 

 

Non-cash items

 

74,221

 

 

 

74,346

 

 

 

113,065

 

 

 

110,013

 

 

Net income adjusted for non-cash items

 

131,979

 

 

 

133,233

 

 

 

147,578

 

 

 

122,174

 

 

Change in working capital accounts

 

(36,010

)

 

 

(32,601

)

 

 

(72,927

)

 

 

(60,473

)

 

Net cash provided by operating activities

 

95,969

 

 

 

100,632

 

 

 

74,651

 

 

 

61,701

 

 

Capital expenditures, net of asset sales

 

(58,823

)

 

 

(40,448

)

 

 

(125,917

)

 

 

(99,117

)

 

Free cash flow

 

$

37,146

 

 

 

$

60,184

 

 

 

$

(51,266

)

 

 

$

(37,416

)

 

 

Karli Anderson
EVP, Chief Environmental, Social & Governance Officer and Head of Investor Relations
karli.anderson@summit-materials.com
303-875-3886

Source: Summit Materials, Inc.